Bersin & Associates Study Predicts Corporate Social Software Market Will Exceed $420M by Year End

Oakland, CA - October 1, 2008 - Bersin & Associates, the only research and advisory firm solely focused on What Works® in enterprise learning and talent management, today released its latest research study, Enterprise Social Software 2009: Facts, Practical Analysis, Trends, and Provider Profiles. The study is based on an in-depth analysis of the corporate social networking software market, highly detailed surveys of 18 cooperating solution providers, customer interviews, and survey data from more than 800 corporations. The result is a comprehensive overview of the market today, an examination of the applicability of social software to corporate users, detailed checklists and selection considerations, as well as an unprecedented analysis of 18 solution providers.

“The most startling finding of this research is the explosive growth of this new market, which is dominated by small, innovative providers.” said David Mallon, principal analyst and primary author of the study. “Last year, providers of corporate social software had revenues of about $277M. We see revenue increasing by 72% to over $420M by end of this year. Approximately 100 vendors offer some kind of solution today, with new companies entering the market on a weekly basis.

“However, our research also shows that the use of social software is still in the early stages within most companies. Typically, most purchases are being made at the departmental and workgroup levels; fewer than 5% of organizations have an enterprise strategy for social networking,” said Mallon.

Research found that the most popular business applications for social networking currently are: customer communities for loyalty marketing and self-service, corporate intranets (sometimes replacing traditional intranet portals), internal corporate communications, employee directories (with emphasis on areas of expertise and skills), project or process collaboration and support, knowledge sharing, onboarding, recruiting, support of formal training, corporate alumni and retiree relations, and succession planning.

Significant Market Potential and Churn

“This is a very exciting market,” said Josh Bersin, president. “In addition to rapid revenue growth – which could reach $2.5B by 2012, the space is characterized by innovation in collaboration, search and tagging, presence awareness, content management, mobile access, and integration with the consumer web. Soon we expect to see maturing strategies from established players such as Oracle, Microsoft, IBM, and SAP, as well as from application providers in the areas of corporate talent and learning management systems. Today there is a land-grab going on, with almost all players experiencing significant growth.”

The study shows that current market leaders, in terms of software revenue, are Atlassian, Jive Software, LiveWorld, Mzinga, and Telligent.

According to Bersin & Associates analysts, social software applications have game-changing potential for business. “Right now, companies are experimenting. Early adopters are using social software for customer service, sales, partner support, and technical knowledge sharing. In the coming year, we expect corporate HR and training to become more involved in its use and to identify how to ways these tools can support important initiatives in their areas, ” said Mallon.

Guidance for Prospective Buyers

Enterprise Social Software 2009 offers information, insight, and objective analysis of 18 solution providers that can guide corporate buyers in selecting and implementing social software applications.

The study includes details on features related to the four Cs of social software: conversation (blogs, microblogs, forums, and discussion groups); connections (user profiles, groups and domains, social networking; collaboration (wikis, work spaces, project and process management, innovation); and content (content sharing, management, development, and search and discover). The study also covers reporting and analytics.

Prospective buyers will find selection criteria lists, specific to corporate needs and priorities. The study discusses the four delivery models and their implications (software as a service is most popular) and the three common implementation models. The study also covers common implementation challenges, including security and permissions, risks and liabilities, community moderation, participation and adoption, IT infrastructure, user interface customization, integration of existing content, and much more.

The study includes detailed profiles of the 18 solution providers who agreed to participate in our research. Each vendor participant completed a questionnaire with more than 500 data points spanning product functionality, marketing, finances, support and services, and customer demographics. Each participant also conducted an extensive demo of the solution for analysts.

Bersin & Associates is the only research and advisory services firm focused solely on research in enterprise learning and talent management. Bersin & Associates’ WhatWorks® research and research-based services are designed to deliver actionable direction and to help improve operational effectiveness and business impact.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks, and in-depth market analyses designed to guide professionals in making fast and confident decisions. Research areas include planning and strategy, learning programs and delivery, talent management, technology and infrastructure, and measurement and analytics. Member benefits include in-depth advisory services, access to proprietary webcasts, on-site analyst visits, and workshops. The company also offers a variety of strategic services for learning and talent management organizations and hosts an annual research conference. IMPACT 2009: The Business of Talent will be held on April 14-16, at The Vinoy Resort in St. Petersburg, FL.

For more information, go to www.bersin.com or call 561 455 0622, ext. 223.

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